Paying the price on health

5th December 2023

Medicines are essential to maintaining the health of a population; after all, only a healthy population can engage in productive activities for economic growth. Nigeria’s current economic realities, evidenced by climbing inflation and foreign exchange crisis, strain businesses and consumers, and the pharmaceutical industry is not exempted from the situation. In August 2023, GlaxoSmithKline, a British multinational pharmaceutical company, announced the end of its 51-year-old business in Nigeria. Barely three months after, Sanofi, makers of the polio vaccine, also announced plans towards their exit. To understand the impact of these developments on the prices of essential medicines in Nigeria, SBM Intelligence gathered data on medication prices across four broad categories between 2019 and 2023. These categories are Antimalarial, Antibiotics, Painkillers and Common Cold medicines.

The analysis showed that the cost price grew faster than the selling price in all the drug categories, signalling increased cost of production in Nigeria and reducing margins for retailers over the years. However, the cost price increase rate of the Painkillers was the slowest among all the medicine categories. Of the common brands examined in the Painkillers category, Emzor’s Paracetamol accounted for the highest rate of cost and selling price increase, growing by over 450% and 250%, respectively, since 2019. It doubled its rate of increase from a 25% jump in the selling price in 2022 to 50% in 2023. The selling price of all the medicines represented in the Common Cold category increased in 2023, with the selling price of Actifed, which GSK manufactures, increasing the most by 62 percentage points between 2022 and 2023.

Across all drug categories, the highest jump in the cost and selling prices was recorded in the Antibiotics section, likely attributed to continued antibiotic demand. This led the manufacturers to use this as leverage to pass on increased production costs to the consumers. On a year-on-year basis, the cost price of Ampiclox recorded the highest rate of increase between 2022 and 2023, jumping by 346 percentage points, while the selling price of Amoxil recorded the fastest rate of increase in the same period, jumping by over 400 percentage points. Both drugs are manufactured by GSK. In the Antimalarials section, Lonart DS recorded the highest cost and selling price increase – up by 110% and 92.3%, respectively, within the four years under review. Conversely, the increase in the cost and selling prices of Loqma QS was the slowest within the same period, increasing by 60% and 29%, respectively. On a year-on-year basis, the selling prices of Lonart DS and Amatem recorded the highest rate of increase in 2023 from the 2022 level. Notably, in 2023, the rate of increase in the cost prices of drugs in this category doubled and, in some cases, tripled the rate of increase from previous years.

With Nigeria bearing the highest burden of malaria in the world, according to the World Health Organisation, antimalarials cannot afford to be out of the populace’s reach. Also, in a recent survey by SBM Intelligence, 19% of respondents reported spending a significant amount of their income on healthcare and 67% of respondents who reported making lifestyle changes due to a high cost of living listed cutting back on healthcare bills. This shows the severity of the situation because when people cut back on health spending, some illnesses may go untreated, creating the risk of a disease outbreak. Given that Nigeria is a major trade and travel hub in the West African region, a disease outbreak could stress other African countries that do not have resilient health sectors and potentially a worldwide health concern. An urgent solution is needed.

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